What can I afford?
Zillow says you can afford $400K. Your gut says $250K. The truth? It depends on your income, your debts, and your down payment — not a vibe check. Plug in your real numbers and get a PITI breakdown plus closing cost estimates that actually mean something.
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The DTI Rule
Lenders use your Debt-to-Income (DTI) ratio to determine how much you can borrow. This is the percentage of your gross monthly income that goes toward debt payments.
DTI = (Monthly Debts + Housing Payment) / Monthly Income- 36% or below: Excellent. Most lenders love this range.
- 37-43%: Acceptable for most loan programs.
- Above 43%: Difficult to qualify for conventional loans.
How Credit Score Affects Buying Power
| Score | Rate Impact | Buying Power |
|---|---|---|
| 740+ | Best rates | Maximum |
| 680-739 | +0.25-0.50% | Strong |
| 620-679 | +0.50-1.00% | Moderate |
| Below 620 | +1.00-2.00% | Limited |
Frequently Asked Questions
How much house can I afford on a $60,000 salary?
On a $60,000 annual salary ($5,000/month gross), most lenders allow a housing payment of roughly $1,400-$1,750 depending on your debts. At a 6.5% rate with 5% down, that puts you in the $200,000-$260,000 range. Your actual number depends on your monthly debts, credit score, and down payment.
What is the debt-to-income ratio and why does it matter?
Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes toward debt payments. Lenders use it to decide how much you can borrow. A DTI of 36% or below is excellent, 37-43% is acceptable for most programs, and above 43% makes conventional loans difficult.
How does my credit score affect how much house I can afford?
Your credit score determines your interest rate, which directly impacts your monthly payment and buying power. A 740+ score might get you a 6.25% rate, while a 660 score could mean 7.0% or higher. On a 30-year loan, that 0.75% difference reduces your buying power by roughly $25,000-$30,000.
Do I need 20% down to buy a house?
No. The average first-time buyer puts down 6-7%. Programs exist for 0% down (VA and USDA loans), 3% down (conventional), and 3.5% down (FHA). Putting less than 20% down means you pay PMI, but that cost is often worth it to buy sooner.
What costs are NOT included in a home affordability calculator?
Most calculators estimate principal, interest, taxes, insurance, and PMI. They typically do not include closing costs (2-5% of the purchase price), moving expenses, furniture, immediate repairs, or ongoing maintenance (budget 1-2% of home value per year).
You've got a starting estimate for your home's value — not a Zestimate, a real range.
Next up: The lender comes later.
Keep the momentum. Step 4 · Connect picks up exactly where this page leaves off — still free, still no credit pull, still no sales call.
This calculator provides estimates for educational purposes only. Actual affordability depends on your complete financial profile, current interest rates, property taxes in your area, and lender requirements. This is not a loan commitment or pre-approval. Property tax rates used are state averages and may differ from your specific location. Consult a licensed mortgage professional for personalized guidance.